Over the past few weeks, the Department of Energy has been considering canceling billions of dollars worth of contracts. Now, the federal agency has authorized the cancellation of $720 million worth of manufacturing incentives.
The cuts will affect companies that make battery materials, recycle lithium-ion batteries and make super-insulated windows.
Energy Secretary Chris Wright is taking a hard look at contracts awarded during the Biden administration. The DOE said those projects “missed milestones” and “failed to adequately drive the nation’s energy needs,” spokesman Ben Diederich told E&E News.
The full amount of the grant was approved by Congress as part of the bipartisan Infrastructure Act of 2021. The majority of the funding was awarded in 2023 and 2024. Previously, the Trump administration had used grants awarded between Election Day and Inauguration Day as a justification to cancel the awards.
The list includes three startups, all of which were selected for grants well in advance of the 2024 presidential election.
Ascend Elements has refined recycling technology that turns manufacturing waste and used batteries into the materials needed to manufacture lithium-ion batteries domestically. In October 2022, the company secured $316 million in funding to build a $1 billion facility in Kentucky.
Federal records show $206 million has already been paid to Ascend Elements. The company said it is moving forward with plans to leverage other funding sources to make up for the shortfall.
Anovion has won $117 million to re-land its technology to make synthetic graphite for negative electrodes in lithium-ion batteries. According to Benchmark Mineral Intelligence, Chinese suppliers control 75% of the synthetic graphite supply chain and produce 97% of all synthetic graphite anodes. The startup’s factory, which will be built in Alabama, has so far spent just $13.8 million, according to a federal database.
Another startup, LuxWall, makes solid walls as well as windows that insulate buildings, an innovative product that can reduce energy use and lower people’s utility bills. The DOE awarded the company $31.7 million to build the plant on the site of an old coal-fired power plant near Detroit. The award was awarded in November 2023, but only $1 million was transferred to the company, according to government records. LuxWall opened the first phase of the factory in August 2024.
TechCrunch previously reported on the Department of Energy’s efforts to cancel these and other contracts.
The grant was aimed, in part, at getting startups across the “valley of death” that can capture many promising companies as they move from technology development to commercial deployment. It was difficult for startups to finance first-of-its-kind factories and facilities, and these government subsidies encouraged private investors to contribute capital. Once operational, it could serve as a template for future factories and strengthen the country’s manufacturing base.
